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Assume that the required reserve ratio is 0.12 for deposits & there are no excess reserves. Assume that the total demand for currency is equal to 0.3 times deposits. a) If t
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Suppose there are two investors. One has a project to build a factory; the other has a project to visit casino and gamble on roulette. Which investor has a greater incentive to iss
Which of the following statements regarding the heckscher-ohlin model and Ricardian trade theory is TRUE? a. Both the Heckscher-Ohlin and Ricardian models are current, relevant,
Using the Mundell-Fleming model, describe how an increase in a country’s risk premium on the world interest rate can result in a higher level of real income. Under what circumstanc
Shortage, Surplus and Price Mechanism: A shortage is the situation in which the demand exceeds supply, which means producers are unable to meet the market demand for the produc
P and Y are both endogenous variables and according to the quantity theory of money we need P.Y = constant. If we divide both sides by P we get Y = constant / P. Because Y = Y D i
effects of a real wage existing in the market that is lower than the equillibrium real wage. what will eventually happen in this labour market if it is perfectly competitive
Q. What do you mean by multiplier effect? Loans and deposits in banks give rise to a significant multiplier effect. We use a simple instance to explain this effect. Consider th
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